While pre-owned car dealer WeBuyCars is doubling down on advanced technologies like artificial intelligence (AI), machine learning and chatbots to sharpen its operations, the company continues to battle sluggish demand for electric vehicles (EVs).
This is according to WeBuyCars CEO Faan van der Walt, speaking to ITWeb on Monday, after the company announced its annual financial results for the year ended 30 September.
During the year, revenue was up 13% to R26.4 billion and core headline earnings rose 15% to R937.6 million.
It bought 180 576 vehicles and sold 179 006 during the year, representing increases of 7.7% and 8.4%, respectively. Monthly sales volumes exceeded 15 000 units in six of the last 12 months.
According to Van der Walt, tech investments played a crucial role in achieving these results during the reporting period.
“In today’s world, if you want to stay ahead of the game, you have to be tech-savvy, and in the motor industry, it’s certainly no different.”
Van der Walt noted the company doubled its market share over the past five years, increasing from 6% to 12%, a shift he attributed largely to improved user experience.
No EV boost
Van der Walt said EV demand in South Africa remains weak, primarily because the country does not offer the subsidies seen in many other markets.
He pointed out that on a like-for-like basis, EVs are significantly more expensive than their conventional counterparts, which discourages buyers.
“Some manufacturers have learnt that the hard way and they are sitting with stock they are trying to move. The uptake of electric vehicles has not been there.”
He said the only EVs that have gained market share are the hybrids, mainly petrol electric hybrid vehicles and plug-ins.
“These make a more compelling case because you can use it for longer trips and it’s something that we are more used to, especially in periods that you might have load-shedding where the electric car doesn’t make a compelling case.”
He noted that in the second-hand car market, electric cars have also not been doing well. “When people buy a used vehicle, the integrity of the battery becomes something they consider. From our data, we have seen that electric vehicles depreciate a lot more than the normal petrol kind of car.
“We are not alone in that because we have seen similar trends in European countries as well…so it’s definitely a concern for the buyers to understand the future value of that vehicle.”
Online asset
He said WeBuyCars will continue to make investments, especially in the website. “We have a portfolio of properties where we trade from and we are going to open two new big facilities in the next few months. But if you would ask me what our most valuable real estate is, it will be our website. That’s where we get over seven million visits a month where people will be looking for cars.”
He pointed out that the company is also increasingly making use of agentic AI to get data sets about customer behaviour.
WeBuyCars recently revealed it had purchased over 2 800 vehicles using AI agents.
“If you use incorrect data sets, you get incorrect answers. We recently launched what we call Orange chatbot, that helps potential buyers to make the right decision. For instance, if you look at a car on our website now, you can ask Orange to tell you about fuel usage of the car to travel from point X to point Y every day, and it will calculate that for you.
“You can also get the cost of ownership in terms of servicing the vehicle. So, it’s not just about the cost of the metal but it also has to do with how much owning a particular vehicle will cost you in the long run.”
He noted the chatbot can also assist clients with estimating the future value of the car.
On how much the company has invested in technology in the past financial year, he said: “We don’t capitalise any of our IT spend…but it’s a very conservative figure every month as we develop new technologies.”
He also noted that the deployment of technologies such as AI has not resulted in job losses at WeBuyCars.
“In fact, we now employ more people. It’s all about providing the right service and making life easier for clients. We could have made some decisions to implement some automation in some cases, or outsource some of the functionalities at WeBuyCars, but it’s not something on our agenda; we love our model and all the components of this business; and we haven’t seen any job losses. Technology is just an enhancement.”
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